After reading your posts and sleeping on it, I agree that this would not be the right move and we’ll be denying this applicant in favor of one of the other more qualified applicants that I’m sure we’ll be getting.

is it against the law to deny them or evict them tho? 

This is good information to know before applying for a loan and could make the difference between getting approved or denied for a particular property. 

@Denis Dineen  - Great job! 

If a claim is later denied they may be your only avenue in an errors and ommissions claim against the agent.Once established you can be placed on annual notice status.

Our credit scores are really good, in the 700s, but these are the reasons we have been denied when applying to some banks for HELOC or equity loan.Any suggestions or referrals you guys can give?

I can neither confirm nor deny this at this time.

I have serious doubts if its been converted into a multifamily...I recently saw 150-yr. old tavern that was attached to the largest grist mill in the country get denied registration...Anyway, location is key...if you are in city limits, or have neighborhood (or deed) restrictions you may be facing a challenge...I know a guy that renovated 20-properties and discovered that the siding had to be replicated to the original...he had to pay a machine shop to create a cutter head so he could mill the siding to the original spec for any repairs.

Lender 1 figured out upfront how it would need to go, Lender 2 just threw spaghetti, and the underwriter was about to deny the loan outright as it was submitted, then Lender 2 flipped it to a rental property to "save" a deal that should never have needed saving.

In my market at least, you have to be working some angle, or the ARV is going to be a lot ton less than the proposed total loan amount (price+reno), and the loan will be denied.